Correlation Between Apollo Global and Dito CME

Can any of the company-specific risk be diversified away by investing in both Apollo Global and Dito CME at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Apollo Global and Dito CME into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apollo Global Capital and Dito CME Holdings, you can compare the effects of market volatilities on Apollo Global and Dito CME and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Apollo Global with a short position of Dito CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Dito CME.

Diversification Opportunities for Apollo Global and Dito CME

0.69

Correlation Coefficient

Apollo Global  Dito CME

Poor diversification

The 3 months correlation between Apollo and Dito is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Capital and Dito CME Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dito CME Holdings and Apollo Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Apollo Global Capital are associated (or correlated) with Dito CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dito CME Holdings has no effect on the direction of Apollo Global i.e., Apollo Global and Dito CME go up and down completely randomly.

Pair Corralation between Apollo Global and Dito CME

Assuming the 90 days trading horizon Apollo Global Capital is expected to generate 1.85 times more return on investment than Dito CME. However, Apollo Global is 1.85 times more volatile than Dito CME Holdings. It trades about 0.03 of its potential returns per unit of risk. Dito CME Holdings is currently generating about -0.16 per unit of risk. If you would invest  0.43  in Apollo Global Capital on December 30, 2024 and sell it today you would lose (0.01) from holding Apollo Global Capital or give up 2.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Apollo Global Capital  vs.  Dito CME Holdings

Apollo Global Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Apollo Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dito CME Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dito CME Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Apollo Global and Dito CME

The main advantage of trading using opposite Apollo Global and Dito CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, Dito CME can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dito CME will offset losses from the drop in Dito CME's long position.

The idea behind Apollo Global Capital and Dito CME Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.